Pola Orbis Holdings Inc. · TSE:4927
Pola Orbis — H1 2016 Earnings Presentation
28 slides from Pola Orbis's earnings presentation, August 2016
Slide 1: First Half of Fiscal 2016 Supplementary Material
First Half of Fiscal 2016 Supplementary Material POLA ORBIS HOLDINGS INC. President Satoshi Suzuki This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reasonable. Actual performance may differ materially
Slide 2: Agenda
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2016 4. Initiatives for Fiscal 2016 Q3 onward 5. Topics and Appendix 1
Slide 3: Q2 Key Topics
Q2 Key Topics Cosmetic Market Japanese cosmetic market kept strong driven by inbound tourists while pure domestic demand is assumed to be flat or slight decline.* Overall China market sustained growth. However, Chinese consumer channel kept scattering from department stores in urban areas toward
Slide 4: Analysis of Consolidated P&L Changes: Net Sales to Operating Income
Analysis of Consolidated P&L Changes Net Sales to Operating Income FY2015 FY2016 YoY Change (mil. yen) H1 Results H1 Results Amount % Consolidated net sales 99,783 106,957 7,173 7.2% Cost of sales 19,140 20,121 980 5.1% Gross profit 80,643 86,836 6,193 7.7% SG&A* expenses 71,403 74,685 3,282 4.6% Op
Slide 5: Analysis of Consolidated P&L Changes: Operating Income to Profit
Analysis of Consolidated P&L Changes Operating Income to Profit Attributable to Owners of Parent FY2015 FY2016 YoY Change (mil. yen) H1 Results H1 Results Amount % Operating income 9,239 12,150 2,910 31.5% Non-operating income 525 229 (296) (56.3%) Non-operating expenses 91 1,121 1,029 - Ordinary in
Slide 6: Factors Impacting Profit Attributable to Owners of Parent
Factors Impacting Profit Attributable to Owners of Parent Profit attributable to owners of parent was up 35.7% yoy. Increases in gross profit and extraordinary income offset non-operating expense from unfavorable currency exchange and increased income tax expenses. （＋） Increase of commissions due to
Slide 7: Segment Analysis
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2016 4. Initiatives for Fiscal 2016 Q3 onward 5. Topics and Appendix 6
Slide 8: Segment Results
Segment Results FY2015 FY2016 YoY Change (mil yen) H1 Results H1 Results Amount % Consolidated net sales 99,783 106,957 7,173 7.2% Beauty care 93,133 99,343 6,209 6.7% Real estate 1,451 1,517 65 4.5% Others 5,197 6,096 898 17.3% Operating income 9,239 12,150 2,910 31.5% Beauty care 8,675 12,080 3,40
Slide 9: Beauty Care Business Results by Brands
Beauty Care Business Results by Brands FY2015 FY2016 YoY change (mil. yen) H1 Results H1 Results Amount % Beauty care net sales 93,133 99,343 6,209 6.7% POLA 50,110 56,760 6,649 13.3% ORBIS 27,676 28,215 538 1.9% Jurlique 7,903 5,914 (1,988) (25.2%) H2O PLUS 1,846 1,242 (603) (32.7%) Brands under de
Slide 10: Brand Analysis (1)
Brand Analysis (1) Q2 Result Topics POLA recorded significant growth both in sales and profit Introduced a season-limited yoy because inbound ratio was low in 2015Q2 and sales of special box from Whiteshot whitening and aging-care products continued to be strong. series in order to expand the (1
Slide 11: Brand Analysis (1): Development of Professional Beauty Directors
Brand Analysis (1) Progress of development of professional Beauty Directors ■Forming the organization centralized in professional Beauty Directors (BDs). - For improvement of “Quality of Sales", development of professional BDs has progressed steadily. - The number of BD was narrowed down due to the
Slide 12: Brand Analysis (2)
Brand Analysis (2) Q2 Result Topics Sales increased due to expansion of the number of Renewed a cleansing liquid which customers. has been a popular item since its Operating income dropped by 2% due to a time shift of initial launch in 1997. (May 23rd) incurring catalog issuance expenses and w
Slide 13: Brand Analysis (3)
Brand Analysis (3) Q2 Result Topics Sales decreased by 14%. (AUD basis) Launched Rosewater Balancing In China, sales were down 29% yoy. Mist Limited Edition (May 12th) (Changed the business to agency model since March) Operating income dropped because of the decrease in sales. Q2 Results (mi
Slide 14: Brand Analysis (4)
Brand Analysis (4) Q2 Result Topics In North America, started shipping renewed products to Released rebranded new products aiming for selected channels which is considered to be appropriate brand restaging. (See images at lower left.) for the brand. In China, the business has ceased operation
Slide 15: Brand Analysis (5) Brands Under Development
Brand Analysis (5) Brands Under Development Q2 Result Topics THREE and decencia were the growth drivers. THREE won several best cosmetic THREE increased its sales by approximately 50% as awards for the first half of 2016. good performance at both of the existing and new (Left) Scalp & Hair Cle
Slide 16: Forecasts for Fiscal 2016
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2016 4. Initiatives for Fiscal 2016 Q3 onward 5. Topics and Appendix 15
Slide 17: Forecasts for FY2016 (Revised)
Forecasts for FY2016 (Revised) With H2 forecast, upward revisions to consolidated net sales by 4 billion yen and operating income by 1 billion yen. Actual vs. Plan Revised YoY Original Difference 2016 Full-year Plan Change Full-year Plan H1 Results As of August 1st As of May 2nd (mil. yen) Amount %
Slide 18: Initiatives for Fiscal 2016 Q3 onward
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2016 4. Initiatives for Fiscal 2016 Q3 onward 5. Topics and Appendix 17
Slide 19: Initiatives from FY2016 Q3 onward
Initiatives from FY2016 Q3 onward Realizing 2014 - 2016 Medium-term Management Plan Sustain stable growth of flagship brands to lead Group earnings Launch new products in the second half aiming to boost repeat purchases in domestic market : - Add a face cream into WHITE SHOT (whitening) series. (J
Slide 20: Initiatives from FY2016 Q3 onward
Initiatives from FY2016 Q3 onward Realizing 2014 - 2016 Medium-term Management Plan Overseas brands contributing to profitability through high sales growth Introduce a new skincare item in order to recover the struggle mainly due to weak product launches during the fist half. (August 25th) Take
Slide 21: Initiatives from FY2016 Q3 onward
Initiatives from FY2016 Q3 onward Realizing 2014 - 2016 Medium-term Management Plan Sales growth and monetization of brands under development For the autumn/winter season, strengthen products in the main skincare line. In Japan, e-commerce started in July. As the first month of the launch, the p
Slide 22: Topics and Appendix
1. Highlights of Consolidated Performance 2. Segment Analysis 3. Forecasts for Fiscal 2016 4. Initiatives for Fiscal 2016 Q3 onward 5. Topics and Appendix 21
Slide 23: Latest news at Our Group
Latest news at Our Group Outline: Pola Chemical Industries received the first approval for manufacturing and sales of a wrinkle-improving quasi-drug in Japan. It is the first-ever quasi-drug that claims for wrinkle-improving function in Japan as there were only quasi-drugs for aging-care but not f
Slide 24: Appendix: About POLA ORBIS Group
Appendix: About POLA ORBIS Group Beauty care is the core business of the Group, and 9 different cosmetic brands are operated under the Group umbrella. FY2015 Consol. Net Sales ¥214.8 bil. Overseas Flagship Brands under Brands Brands development High prestige ¥10,000 Prestige Beauty care business 93%
Slide 25: Beauty Care Business Brand Portfolio
Beauty Care Business Brand Portfolio Sales Brand Concept and products Price Sales channel ratio* Consignment sales through High-prestige skincare Approx. Beauty Directors： 55% Leading-edge technology in ¥10,000 POLA THE BEAUTY (PB), anti-aging and skin-whitening Esthe-inn and conventional door
Slide 26: Appendix: Beauty Care Business FY2015 Results by Brands
Appendix: Beauty Care Business FY2015 Results by Brands FY2014 FY2015 YoY Change (mil. yen) Results Results Amount % Consolidated net sales 198,094 214,788 16,693 8.4% Beauty care net sales 184,475 200,570 16,095 8.7% POLA 99,571 109,352 9,780 9.8% ORBIS 52,302 56,354 4,051 7.7% Jurlique 17,600 18,3
Slide 27: Appendix: Long-term Vision
Appendix: Long-term Vision Corporate Philosophy STAGE3 “Inspire all people and touch their hearts” Become a highly profitable global enterprise Consolidated Net sales STAGE2 Goals for FY2020: •Consol. net sales: ¥250.0 bil. or higher (bil. yen) Further strengthen domestic •Overseas sales ratio: 20%
Slide 28: Appendix: 2014–2016 Medium-term Management Plan
Appendix: 2014–2016 Medium-term Management Plan The 2nd stage of the long-term vision for 2020 Aim to enhance the enterprise value by further strengthening domestic earnings structure, accelerating overseas expansion, and improving capital efficiency. Consolidated net sales Capital efficiency Cons